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PARKERSBURG -- A proposal by Gov. Jim Justice has the support of AARP in West Virginia.
Justice proposed the full elimination of the income tax on Social Security benefits in his address last week to the Legislature.
The elimination is the No. 1 issue for members of AARP-West Virginia and therefore is the No. 1 issue for the organization, Gaylene Miller, executive director of AARP West Virginia, said.
AARP was aware that the elimination of the income tax on Social Security income was among Justice's legislative initiatives.
"We were very, very delighted that it was," she said.
In addition to the elimination of the income tax on Social Security, Justice also proposed an expansion of the property tax credit for senior citizens and a tax credit for child and dependent care.
A partial income tax reduction on Social Security is currently in place in West Virginia, which is on $50,000 and below for a single filer and $100,000 for a couple, Miller said. Seniors who can use the money for bills and other expenses believe they have already paid the income tax on their Social Security incomes, Miller said.
The elimination of the income tax on Social Security represents about $37 million in revenue, Larry Pack, acting secretary of the Department of Revenue, said at a Senate Finance Committee meeting last week about the governor's budget proposal. West Virginia is one of about 10 states to tax Social Security benefits and income, he said.
"We would like to remove West Virginia from that list of outliers," he said.
Legislators are receptive to the elimination of the tax on Social Security, some aren't, but lawmakers have yet to see the revenue numbers and the financial impact, Delegate Scot Heckert, R-Wood, said.
"Elimination of the income tax on Social Security is a no brainer," Heckert said.
Miller agrees there's support among lawmakers for the elimination of the tax on benefits.
"I don't know if it's unanimous," she said.
At least five bills have been introduced in the House and Senate since the beginning of the session about the partial or total elimination of the income tax on Social Security and have been referred to the finance committees in both chambers. House Bill 4406 would, for example, eliminate the tax on the first $100,000 on those filing jointly and $50,000 on those filing single.
Three bills at the request of the governor were introduced Tuesday in the Senate: SB 458 for the exemption of the personal income tax on Social Security; SB 459 to increase the homestead exemption for seniors; and SB 460 for the child and dependent care credit on personal income taxes.
The governor's office on Tuesday issued a release with some details about the three tax cuts.
The Social Security Benefit Exemption will help more than 50,000 senior households, the office said. It removes the income cap on excluding Social Security income from taxation and reduces the tax burden for many low- and middle-income seniors, brings West Virginia in line with 40 other states that don't tax Social Security and is supported by AARP in West Virginia.
The Child and Dependent Care Tax Credit will help more than 16,000 families in West Virginia, the governor's office said. The proposed tax credit would be equal to 50% of the allowable federal child and dependent care credit and would make childcare more affordable for families and follows the existing federal credit for easier understanding and compliance.
The maximum child care credit would range from $300 to $525 for one child and from $600 to $1,050 for two or more children depending on the amount of out-of-pocket expenses incurred and income level, the office said.
The Senior Citizen Property Tax Credit will benefit seniors with homestead property taxes and federal adjusted gross income below 200% of the federal poverty guideline. It would increase the maximum credit amount by 50% and expand by another 50% of the federal poverty guideline and effectively reduce the property tax burden for eligible seniors and will reach more low- and middle-income seniors within the eligibility range, according to the governor's office.
Justice also proposes each part of the package be retroactive to Jan. 1, 2024.
According to the governor’s office, the revenue breakdown is: $37 million, Social Security tax elimination: $8.5 million, senior homestead credit; $4.2 million, child care credit.
"These tax cuts are about putting West Virginians first," Justice said. "We're continuing to make West Virginia a more affordable place to live, raise a family, and retire, and these proposals demonstrate my commitment to putting real money back in people's wallets, helping families raise their kids, seniors stay in their homes, and everyone breathe a little easier. I encourage the Legislature to strongly consider these proposals."